Rule Split to Put U.S. Banks at a Loss

How bad is a bad bank loan? Accounting regulators in the U.S. and Europe disagree, and their rift could lead to tens of billions of dollars being carved off U.S. lenders' current profits.

American and global rule makers have separate proposals in the works that would require banks to record losses on soured loans earlier than they do now. The plans aim to give investors a more accurate picture of banks' health, after many critics felt...